Miliband attacks govt ‘integrity’ over deficit

By Alex Stevenson

Ministers are refusing to back down on their deficit reduction plans because of a fear of losing face, Ed Miliband has suggested.

Chancellor George Osborne has called the measures to cut spending and increase taxation the "rock of stability" on which the coalition government is built.

But 12 months of a stagnating economy and higher than expected public sector borrowing in August have placed further pressure on the coalition to reduce the negative impact on the economy.

"In the end the policy levers are there. The question is will," he told BBC1's The Andrew Marr Show this morning.

"Does the government have the political will? Are they more interested in protecting the integrity of their own plan or the integrity of the British economy? I say they should care more about the integrity of the British economy."

Mr Cameron pointed out that Britain's deficit was the same size as Greece, Spain and Portugal, the causes of the current eurozone crisis, in a stateside interview with ABC, however.

"We are not in trouble because we have actually shown the world we have a plan to deal with this," the prime minister said.

He argued that simply "turning on the money taps" in Europe was not an option because the problem was a "debt crisis" rather than a "traditional cyclical recession".

But public opinion appears to be moving Labour's way. An opinion poll for the Guardian by ICM published on Friday found nearly two-thirds felt the coalition's spending cuts went too far. That compared to 35% expressing a similar view in March.

"You don't need the polls to tell you that people are worried," deputy Labour leader Harriet Harman wrote in an article for the Independent on Sunday newspaper.

"Whether they work in the public or the private sector they're anxious about the security of their job. Even with low interest rates, people are seeing their standard of living fall – with frozen pay having to stretch to meet rising costs, such as energy bills."

The same poll found 60% thought Mr Miliband did not have the right qualities to be an effective prime minister. It put Labour on 38% overall, giving the opposition a lead of just one point over the Tories on 37%. The Lib Dems trailed on 14%.

Ms Harman argued that Labour had to "take action" through its councils and remind politicians that "concerted political action can make a difference".

"We must continue to confront the government with the fact that its decisions are making things worse," she added.

"And while admitting where we got things wrong, we will continue to rebut the government's lie that Labour caused the global financial crisis rather than irresponsible bankers."

The global economy currently faces a crisis similar to that confronted by former Labour PM Gordon Brown in 2009, when he chaired the G20 summit which led to the adoption of stimulus measures worth $1 trillion.

Yesterday the International Monetary Fund said eurozone countries would take whatever steps are necessary to deal with the current crisis.

Its communiqué, which came after a meeting of finance ministers, stated: "Today we agreed to act decisively to tackle the dangers confronting the global economy.

"These include sovereign debt risks, financial system fragility, weakening economic growth and high unemployment.

"Our circumstances vary, but our economies and financial systems are closely interlinked.

"We will therefore act collectively to restore confidence and financial stability, and rekindle global growth."